Posts by Moriah Kairouz Batza

Sports Leagues Chided Over Supreme Court Brief

Featured in Gambling Compliance | By Chris Sieroty

Whether the federal sports-betting ban is overturned or upheld by the U.S. Supreme Court comes down to the simple question of whether Congress has the right to compel a state to ban wagering, according to gaming industry lawyers.

In their 71-page brief filed Monday with the U.S. Supreme Court, the National Collegiate Athletic Association (NCAA) and the U.S. professional sports leagues argued against the idea that the 1992 Professional and Amateur Sports Protection Act (PASPA) impermissibly “commandeers” states’ rights to implement laws and regulations banning sports betting.

Paul Clement, an attorney with Kirkland & Ellis in Washington, D.C. who represents the NCAA and professional leagues, wrote that PASPA “does not compel state or state officials to do anything.”

“That is because PASPA only prohibits states from sponsoring, operating, advertising, or promoting sports gambling schemes, and prohibits states from licensing or authorizing third parties to engage in that conduct.”

But such an argument is questionable, said David Yellin, an attorney with Ifrah Law in Washington, D.C.

“Were PASPA as the leagues describe it, they might be correct,” Yellin said. “They treat PASPA as akin to any complex federal regulatory scheme when it is, in fact, quite unusual in requiring states to regulate in-state conduct.”

According to Yellin, “the question is not whether state law is pre-empted by federal law.”

“It is whether Congress, by requiring states to do the dirty work of prohibiting sports betting, has impermissibly commandeered the states for its own purposes.”

Keith Miller, a professor with Drake University Law School in Des Moines, Iowa, said federal law takes precedence over state statutes.

“So it really does become a matter of whether PASPA requires the states to do anything except not operate or authorize sports betting,” Miller told GamblingCompliance.

Over the years, the NCAA, National Hockey League (NHL), National Basketball Association (NBA), National Football League (NFL), and Major League Baseball (MLB) have successfully blocked New Jersey’s efforts to permit sports betting by arguing they would suffer harm from gambling.

But any mention of potential harm to the leagues is contained to just one paragraph in Monday’s Supreme Court brief, which argues that “Congress has long recognized and sought to contain the harms that can flow from various forms of gambling.”

The traditional argument that betting would cause harm to the leagues may have been undermined by recent decisions of the NHL and NFL to allow professional sports franchises in Las Vegas.

“That is probably part of it, particularly since [NHL commissioner] Gary Bettman has not been particularly concerned with gambling,” Yellin said.

Miller said it may be the leagues “thought it was a distraction to their central point.”

The NHL’s Vegas Golden Knights began their inaugural season this month playing their games at the T-Mobile Arena on the Strip, which is owned by MGM Resorts International.

NFL owners voted 31-1 in March to allow the Oakland Raiders to move their franchise to Las Vegas by 2020.

“It also probably reflects the fact that the commissioners of the NBA and MLB have both publically come out in favor of legalized sports betting,” Yellin said.

The Supreme Court will hear oral arguments in the New Jersey sports-betting case on December 4, with a decision likely to be issued sometime before June.

Sports wagering advocates are hopeful that justices will strike down PASPA as unconstitutional and open the doors to widespread sports betting across the United States.

However, Miller said the court could also “issue a very narrow ruling that really leaves most of PASPA intact.”

“Regardless of the court’s decision, I think it is inevitable that Congress will get involved in this” he said. “The leagues are not likely to stand by and allow states to offer sports betting according to their differing regulatory and licensing practices, even if the court would
give the states authority to do that.

“The leagues are likely talking to members of Congress about this now.”

The Massachusetts Special Commission on Online Gaming, Fantasy Sports Gaming and Daily Fantasy Sports met on Monday and voted whether to accept afinal version of its report.

The purpose of the report was to conduct a comprehensive study relative to the regulation of online gaming, fantasy sports gaming and daily fantasy sports. The report is receiving much attention over the fact that in it, the Commission recommended that DFS be defined under the umbrella of “online gaming”.

Legal Sports Report has done a great article on what that means for the state and DFS is general.

The Commission’s report also cites and draws conclusions from iDEA’s economic impact study. iDEA’s study is noted in the report regarding two important aspects affecting the online gaming debate: underage gaming and problem gaming. Also, the organization’s perspective was accurately reflected in relation to the contradictory results of the Rutgers’s study.

New Jersey’s igaming industry was found to have directly and indirectly generated $998.3m (€891.9m/£779.6m) in output from 2013 through 2016.

The igaming industry in the state also created 3,374 jobs, $218.9m in wages to employees, and $124.4m in tax revenue to state and local governments, including $83.5m in igaming taxes.

Jeff Ifrah, a gaming attorney and one of iDEA’s founding members said: “New Jersey’s experience provides valuable lessons for other US states considering iGaming legalisation in the future.

“The state’s operating environment and regulatory structure provides a portable model which can be modelled by other jurisdictions, bringing much-needed jobs and tax revenue.”

“New Jersey iGaming is also a success from a regulatory perspective, with some of the strictest iGaming regulation protocols in the world; these regulations guarantee that operators are accountable, and that players can trust that they will be protected.”

The study found that negative impacts, predicted by igaming’s opponents, such as a possible increase in underage gambling, money laundering, and fraud, were as yet unfounded.

This bodes well for other states such as California, Illinois, Washington, Massachusetts, Pennsylvania and New York that are considering regulation.